There are other FHA loan perks, too.

For example, FHA loans are assumable. This means that a future buyer of your home can “assume” its existing mortgage at whatever the mortgage rate happens to be.

If today’s mortgage rates are 4% and rates are ten percent when you sell, instead of applying for a new loan, your buyer can assume your existing 4% FHA mortgage rate instead.

Another FHA loan perk is that FHA mortgage rates don’t change with low credit scores or property type. FHA mortgage rates are the same, no matter whether your score is a 740 or a 580; or, whether you live in a single-family home or a 4-unit.

Everyone gets access to the same FHA mortgage rates.

2020 FHA loan limits by county

In order to get approved for an FHA loan, your loan size must be within the maximums of what the FHA will insure.

Known as “FHA loan limits”, these maximums vary by area, based on local median home values; and, by property type.

FHA loan limits throughout Mississippi and Alabama, for example, are lower than FHA loan limits in the Bay Area of California; and, in Los Angeles and Orange County.

And FHA loan limits on a 2-unit home are higher than the limits on a condo.

There are four tiers of FHA loan limit pricing. There’s a standard tier, a mid-range tier, a high-cost tier, and a special exception tier. The majority of the United States is “standard tier”.

For 1-unit homes — properties which include single-family detached homes, townhomes, row homes, condominiums, and co-ops  — FHA loan limits now begin at $331,760 .

Look up your local FHA loan limits here.

Standard 2020 FHA loan limits

• 1-unit home : $331,760
• 2-unit home : $424,800
• 3-unit home : $513,450
• 4-unit home : $638,100

Standard FHA loan limits, like all loan limits, are based on a mathematical formula.

The “floor”, which governs FHA loan limits in more than 80 percent of U.S. counties, is equal to 65% exactly of the conforming loan limit of $510,400.

It’s used in cities where you can multiply the median home price by 1.15% and the product is less than $331,760.

Mid-range 2020 FHA loan limits

• 1-unit home : From $331,760 to $331,760
• 2-unit home : From $424,800 to $424,800
• 3-unit home : From $513,450 to $513,450
• 4-unit home : From $638,100 to $638,100

Mid-range FHA loan limits apply to cities where you can multiply the median home price by 1.15% and get a product greater than $331,760. Whatever that product is, so long as it’s less than $331,760, is the local FHA loan limit.

Areas in which mid-range FHA loan limits apply include Cincinnati, Ohio; Philadelphia, Pennsylvania; Minneapolis/St Paul, Minnesota; and Boston, Massachusetts.

High-cost 2020 FHA loan limits

• 1-unit home : $331,760
• 2-unit home : $424,800
• 3-unit home : $513,450
• 4-unit home : $638,100

High-cost FHA loan limits are the maximum insurable FHA loan size — sometimes called the “ceiling”.

High-cost areas are areas in which the median home price multiplied by 1.15% is greater than $331,760. There are approximately 80 of them nationwide.

High-cost areas include Washington, D.C. suburbs Loudoun County, Virginia; and Bethesda and Potomac, Maryland; as well as San Jose, California; and the entire New York City metro area.

Special exceptions 2020 FHA loan limits

• 1-unit home : $1,148,400
• 2-unit home : $1,470,475
• 3-unit home : $1,777,375
• 4-unit home : $2,208,825

The FHA grants “special exception” loan limits for certain parts of Hawaii, Alaska, Guam, and the U.S. Virgin Islands. The elevated loan limits are designed to offset higher construction costs in these states and territories.

FHA Streamline Refinance and loan limits

Among the biggest benefits of using an FHA-backed mortgage is access the agency’s designated home loan refinance program — the FHA Streamline Refinance.

Generally, FHA streamline refinances must adhere to regular loan limits established by HUD.

Beyond that requirement, the FHA Streamline Refinance is available to homeowners with an existing FHA mortgage. It gives homeowners the ability to refinance without having to verify income, credit, or employment.

The FHA Streamline Refinance has three main qualification standards.

First, in order to get qualified, you have to be making your current mortgage payments on time.

The Federal Housing Administration does not extend the FHA Streamline Refinance to homeowners who are behind in their payments, or who have a history of falling behind on the payments.

The FHA wants to see that your last 3 mortgage payments have been paid on time, and that you’ve been late on payments no more than one time in the last 12 months.

Second, your current FHA mortgage must be at least 6 months old.

The FHA will verify that you’ve made at least six payments on your current mortgage before allowing you to use the FHA Streamline Refinance program. Once you’ve made six payments, you’ve cleared this hurdle.

And, third, the agency will verify that there’s a “benefit” to your refinance.

Known as the Net Tangible Benefit clause, your “combined rate” must drop by at least 0.5%. You can achieve this portion of FHA eligibility by dropping your interest rate, mortgage insurance rate, or a combination of both.

The FHA Streamline Refinance is among the FHA’s most popular programs.

What Are Today’s Mortgage Rates?

The 2020 FHA loan limits apply to all loans beginning January 1, 2020.

Check your eligibility for a lower rate and payment at the link below.